Correlation Between Kinder Morgan and Enterprise Products
Can any of the company-specific risk be diversified away by investing in both Kinder Morgan and Enterprise Products at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kinder Morgan and Enterprise Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinder Morgan and Enterprise Products Partners, you can compare the effects of market volatilities on Kinder Morgan and Enterprise Products and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kinder Morgan with a short position of Enterprise Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinder Morgan and Enterprise Products.
Diversification Opportunities for Kinder Morgan and Enterprise Products
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinder and Enterprise is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kinder Morgan and Enterprise Products Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Products and Kinder Morgan is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kinder Morgan are associated (or correlated) with Enterprise Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Products has no effect on the direction of Kinder Morgan i.e., Kinder Morgan and Enterprise Products go up and down completely randomly.
Pair Corralation between Kinder Morgan and Enterprise Products
Considering the 90-day investment horizon Kinder Morgan is expected to generate 1.57 times more return on investment than Enterprise Products. However, Kinder Morgan is 1.57 times more volatile than Enterprise Products Partners. It trades about 0.11 of its potential returns per unit of risk. Enterprise Products Partners is currently generating about 0.12 per unit of risk. If you would invest 1,633 in Kinder Morgan on August 27, 2024 and sell it today you would earn a total of 1,216 from holding Kinder Morgan or generate 74.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinder Morgan vs. Enterprise Products Partners
Performance |
| Timeline |
| Kinder Morgan |
| Enterprise Products |
Kinder Morgan and Enterprise Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinder Morgan and Enterprise Products
The main advantage of trading using opposite Kinder Morgan and Enterprise Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinder Morgan position performs unexpectedly, Enterprise Products can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Enterprise Products will offset losses from the drop in Enterprise Products' long position.| Kinder Morgan vs. ONEOK Inc | Kinder Morgan vs. MPLX LP | Kinder Morgan vs. Enterprise Products Partners | Kinder Morgan vs. Energy Transfer LP |
| Enterprise Products vs. MPLX LP | Enterprise Products vs. Kinder Morgan | Enterprise Products vs. ONEOK Inc | Enterprise Products vs. Energy Transfer LP |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |